My colleague Ben Gilad posted a terrific essay on the shortcomings of “data-driven” decision-making.

I love data. I spent 15 years playing with the PIMS database alongside luminaries such as Michael Porter, Sidney Schoeffler, Robert Buzzell, and more. Many years later, I can run a few hundred million simulations before breakfast and tell you what they mean before the coffee’s temperature drops to 80 degrees F. I told you, I love data.

But data isn’t learning, and learning isn’t just about the amount of data. Is one data point enough for learning? How about a trillion?

When smart people fail, their failures are often (not always) because what they think they know is wrong. There’s often a deeper failure, a failure of knowledge, learning, and framing, rather than a failure of execution or data.

To see why, let’s look at rats.1

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You might think I’m announcing that today there is strategy in the United States. Such a discovery would indeed be welcome but it’s not what I mean. I mean that you can see strategy in almost every newspaper article. All you need is to want to see it!
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Myth: to be number one you need to be the best. USA Today reported on a Consumer Reports survey of fast-food customers. They ranked McDonald’s last in burgers (The Habit Burger Grill, a regional chain, was first), KFC last in chicken (Chick-fil-A was first), and Taco Bell last in burritos (Chipotle was first).

It’s not that Taco Bell placed last in salads or McDonald’s had the worst egg sandwich. The chains were at the bottom with their core products.

Consumer Reports’ project editor explains the ranking as a result of Millennials caring about things other than mere value for money, such as quality and social issues. I wonder if it is because they still live with parents who pay their bills. That seems unlikely in light of analysis that shows most millennials living at home for economic reasons. Perhaps a few slackers go out to restaurants better than the bottom-feeder fast-food giants while their parents pick up their expenses, but most are probably still eating at the McDonald’s of the world while realizing it is not the best, it is the cheapest.

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“The Sound of Competing” Episode 3: Culture Doesn’t Replace Strategy


Every corporation has a corporate culture. Is yours a competitive advantage?

Many pundits, especially those from the “soft” social sciences (psychology, sociology, anthropology), make a case that corporate culture is a critically important source of competitive advantage. They call for open and empowering cultures that they say uniquely encourage innovation and success. Yet, just as attitude can take you only so far in soccer if your stars are injured, culture can take you only so far within the competitive economics of the industry. Companies creaking with old-fashioned management styles have succeeded over decades. Startups wielding the most open, progressive, and innovative cultures have failed overnight.

The one aspect of culture which is critical is how information flows inside the organization. The reason: whether your management is an authoritarian, cigar-chomping Lord High Everything or an enlightened, organic Collective of Nice Dedicated Associates, without information you wear a blindfold during the big game.

In the podcast you’ll hear about the category of information that’s the most crucial to decision makers, why it is scarce, and what it takes to make it flow.

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“The Sound of Competing” is a new podcast from Competing.com. It’s conversations from Ben and Mark, plus the occasional reckless guest. It’s remarkable. It mixes serious concepts with humor. It’s edgy without sacrificing critical thinking. It’s the antidote to the silly and shallow. Also, there are titanic battles between good and evil. A ping pong match between two strategy giants resulting in commentary smart enough to listen to.

Subscribe by RSS feed

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A solid business strategy doesn’t have to be groundbreaking, it just has to provide value. Some companies even gained a competitive advantage from their own non-innovative business strategies.
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Harvard Business School Professor Clayton Christensen published The Innovator’s Dilemma and laypeople and pundits fell in love. They fell in love with Prof. Christensen’s buzzword: disruptive. You, too, may cast a romantic smile toward your dictionary right about now.

Companies with modest revenues are said to be worth IPO billions due to their disruptive business models. The most-sought-after disruptions are those hailed as truly new ways of doing things. Yet the frantic race to the next disruptive technology or innovation brushes off old-fashioned business models that eschew “innovation” for the sake of innovation (see also my article The Strategic Mind At Work). Those drab old business models merely make money.

Business models, whatever the term means to you, don’t have to be about the biggest disruption or the latest technology. Old-fashioned strategy can triumph without disrupting anyone. Remember the joke about investing millions in space pens that can write without gravity, when a pencil would suffice? No joke here. Let the pseudo-savvy investor crowd rush to pour billions into the latest techno-gamble. You quietly find real value.

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Competitive advantage comes not only from a company’s products or services but also from its management style. A collaborative culture inside the company builds competitive advantage in the marketplace.

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Are your most-dangerous competitors in the marketplace or inside your own company?

As a leader in your enterprise, you may seldom talk about internal competition, but you deal with it constantly. People are competing for the next promotion, the attractive assignments, and the workspace next to the window.

Manage that competition right and it helps the best ideas and talent rise to the top. Manage it wrong and it stifles collaboration. How you manage internal competition carries substantial consequences for your company and you.

Let’s look at examples from two Fortune 500 companies. Both were industry leaders that hired top talent, provided outstanding benefits, and promoted from within.

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LG and Samsung recently made smart decisions in the emerging OLED TV industry. Good for them, because competitive advantage comes from smart decision-making. What’s remarkable is that their smart decisions take them in opposite directions.
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Remember the bitter VHS versus Betamax war? Of course you don’t. You’re too young. I remember, though. I even took a stand in favor of Betamax. Betamax lost.

Remember the more-civil Blu-ray versus HD-DVD war? Of course you don’t. You were too busy pecking at your new iPhone. The iPhone came out in 2007. Blu-ray beat HD-DVD in 2008. That time my favorite won. No, that doesn’t mean I got smarter. It means the rest of the world did.

Now we have a war that didn’t happen, sort of, if we can imagine such a thing. According to Scott Wilkinson, Editor of AVS, LG is “forging ahead” with its OLED products for 4K/UHD TVs.1 (Don’t panic. That just means really, really good TVs.) Mr. Wilkinson also says Samsung has decided not to build a new facility to manufacture OLED panels for TVs, thereby calling off the war with LG.

LG and Samsung took opposite strategies, and both made smart decisions. The decisions would be equally smart if it were Samsung that was forging ahead and LG that was, as AVS said, “hitting the pause button.” But one of those smart firms is sure to be denounced later on for making a bad decision.

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How do you create competitive advantage? Elon Musk found the way, and the competitive advantage he enjoys makes his companies the best companies to work for today. Tomorrow may be a different issue.

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Today we will look at three best companies, which together I will dub Elon Musk Enterprises. The reason these are the best companies to work for is that they are wonderfully independent of the uncertainties and vagaries of the free market.

Developing strategy is hard. Developing strategy that makes business news is even harder. One way to do it is Willi Robertson’s: work hard, look weird, and promote your brand relentlessly under god. Another is to possess the strategic thinking of Elon Musk.

Launching a new strategy is fraught with unexpected problems since consumer demand is always somewhat unpredictable. Oprah Winfrey can attest to that with her W network. Implementing a strategic plan, however, should be easier if the strategy actually has a coherent, consistent set of activities behind it. It helps further when the set of activities behind a strategy is simple and elegant.

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